ALBUQUERQUE, NM (AP) – The New Mexico Supreme Court is being asked to reconsider its decision allowing the state’s largest electric utility to defer issuance of interest credits to customers impacted by the recent closure of one of the largest coal-fired power plants in the state Southwest were prompted .
The attorney general and consumer advocates filed motions this week, arguing that the delay in providing economic relief to customers by closing the San Juan power plant in September undermines a law in New Mexico that is guiding the state’s transition away from fossil-fuel power generation.
Regulators in June ordered New Mexico’s Public Service Co. to begin lending because customers would no longer benefit from the San Juan facility. The utility challenged the agency’s order, seeking a stay, which the court granted earlier this month.
The New Energy Economy group alleges in its filing that PNM violates the most fundamental principle of utility regulation — that a utility cannot collect money from tariff payers for assets that are not performing services.
“This is a significant and unfair burden on taxpayers, who must continue to pay PNM, which is essentially ‘free money’ after this one, for the duration of this appeal or, according to PNM, until the next tax case is initiated, which can take years.” call is closed,” New Energy Economy said in a brief letter.
The Supreme Court has yet to rule on the merits of the case, and it’s unclear how quickly it could consider the motions filed this week.
Consumer advocates also raised concerns that if the utility were allowed to delay interest credits from the San Juan power plant, it could set a precedent for PNM delaying loans related to the sale of stakes in an Arizona nuclear power plant.
The utility has argued that the suspension should remain in place in the San Juan case, saying the cost of doing business has increased and that delaying lending would mean smaller rate increases for customers going forward.
New Mexico’s Energy Transition Act was designed to mitigate the economic fallout to close the coal-fired power plant near Farmington and find a way to ensure a zero-carbon standard for investor-owned utilities by 2045 and for rural electricity cooperatives by 2050.
While PNM has said it will meet the goal by 2040, there have already been delays in planned solar and battery storage projects designed to replace capacity lost from the San Juan shutdown. The utility has blamed global supply chain issues and recognized the challenges in meeting customer demands 2023 and 2024.
The joint motion, filed by the Attorney General’s Office, Western Resource Advocates, of the Coalition for Clean Affordable Energy and Prosperity Works, includes testimony from Rep. Nathan Small, a Las Cruces Democrat who co-sponsored the 2019 Energy Bill.
Small explained that the interest credits in question would offset increases in customer bills that PNM now charges through its fuel and electricity cost adjustment clause, which allows for quarterly increases in electricity tariffs to recover funds from purchasing power in wholesale markets and fuel for power plants.
A statement from an energy consultant accompanying the application shows that PNM has increased tariffs twice since July under the adjustment clause and that a further increase was expected in January. The filing suggests that PNM’s financial interests could still be protected if the court lifted the stay.